Describe how positive externalities differ from negative externalities.
Demonstrate how the presence of an externality may lead to an inefficient allocation of resources.
Explain how private responses could remedy the externality problem.
Evaluate the advantages and limitations of various private responses that seek to remedy the externality problem.
Explain how public responses (government policies) could remedy the externality problem.
Evaluate the advantages and limitations of various public responses to the externality problem.
Identify potential distributional implications of private and public responses to the externality problem.
